Given the sharp losses experienced by investors this year — the past two months in particular — there are two obvious questions that come to mind: why are markets falling, and what to do in response. On a year-to-date basis, the MSCI World index is down 5.8% and the FTSE/JSE SWIX index 15.8%, while the rand has depreciated from R11.70 to the dollar to about R14.50. On the “why” front, the answer is a complex conflation of factors. The sell-off has been largely driven by concern about global growth — and particularly the slowdown in China, likely to be worsened by the US trade tariffs, and the US which may well have peaked. Corporate earnings forecasts of many listed US companies have been cut due to increasing wage bills and interest-rate costs. Europe is looking messy. There is the uncertainty of Brexit, Italy challenging the budgetary limits of the eurozone and both Poland and Hungary straining the cords that bind the EU together. The US’s reimposition of sanctions on Iran and the...

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